The Twilight of Sovereignty? Walter Wriston, Financial Globalization, and Neoliberal Development in Latin America

Conrad Jacober, Johns Hopkins University

Recent literature in political science has argued that American bankers unwittingly built the financial infrastructure that the US government has since used to implement global economic sanctions, in the mistaken belief that they were escaping the power of the state. This paper argues that Walter Wriston, CEO of Citibank (1967-1984) and the most influential banker of his generation, instead lobbied the US government to backstop the globalization of American finance and implement neoliberal development reforms in Latin America beginning in the early 1960s, which laid the groundwork for the neoliberal turn in development policy that became known as the Washington Consensus. Based primarily on a collection of speeches given by Wriston during his tenure as head of Citibank’s Overseas Division from 1959 to 1967, this paper shows how Wriston combined demands for free markets and removing capital controls with calls for state intervention on behalf of US foreign investment, which included assurances of US military support, conditioning aid on neoliberal reforms, increasing US government insurance for foreign investment, and globalizing the takings clause of the Fifth Amendment to exact compensation for expropriation. This paper contributes to the literature on the role of American banks in the expansionary legal foundations of neoliberalism as well as to recent efforts to historicize what economist Daniela Gabor has termed the Wall Street Consensus. Finally, this chapter shows how Wriston’s neoliberal globalism first impacted policy debates through coordination with fellow bankers and businessmen to consolidate their lobbying efforts for neoliberal reforms in the early 1960s, beginning with a dissent against the Alliance for Progress, Kennedy’s Latin American development initiative, and culminating in the creation of the Business Group for Latin America. At the urging of Latin American neoliberals, US businessmen closed ranks and consolidated their lobbying efforts for neoliberal development reforms in Latin America.

No extended abstract or paper available

 Presented in Session 3. Media and Technocracy